Financing for development and global business

Governments are meeting this week in New York to revise a global framework for financing sustainable development ahead of the United Nation’s International Conference on Financing for Development in July.

The United Nation’s International Conference on Financing for Development in July will discuss how implementation of the post-2015 Sustainable Development Goals (SDGs) will be paid for.

Ahead of the week-long session, the International Chamber of Commerce (ICC) represented the business community at special UN hearings on “Financing for Sustainable Development” at the UN headquarters on 8 April. The hearings were the first opportunity for the private sector to provide direct input to policymakers on the development of a new global framework to support development financing.

The post-2015 development agenda-which is expected to be finalized this September-will require the mobilization of significant resources from both the public and private sectors. While aid spending will remain a crucial part of international development co-operation, there is growing recognition that a much stronger role for private capital will be needed. One recent report from the London-based Overseas Development Institute pointed to a possible US$73 billion financing gap to implement the anticipated SDGs.

Speaking at the high-level opening of the hearings, ICC Secretary General John Danilovich, said: “The number of people living in cities is expected to double by 2030… The scale of infrastructure financing required [as a result] calls for solutions that go beyond the means of the public sector alone… We believe the global business community is central to addressing the existing infrastructure deficit and shifting our global economy into a more inclusive and sustainable trajectory.”

Financing SMEs

A particular focus of the hearings was the ability of small- and medium-sized enterprises (SMEs) to access bank finance. This has been highlighted by the G20 and the UN as a major obstacle to growth in developing and least developed economies-with SMEs largely underserved when it comes to basic financial services.

Access to trade finance is now seen as the single biggest barrier to SME growth. We are taking urgent action to address this problem-including through the launch of a new education initiative, the ICC Academy.

In recent months, ICC has highlighted particular concerns about what appears to be a growing shortage of trade finance in some markets. Trade finance-provided in the form of instruments such as letters of credit and guarantees-supports roughly one third of global trade flows. It is one of the safest forms of finance and has the advantage of directly promoting development through trade.

2015 – the year of sustainable development

The coming months are expected to see the agreement of three important global frameworks to support sustainable development through to 2030. In addition to a new pact on development financing and the expected culmination of the SDG process, hopes are high that a global climate change agreement will be forged at the Paris climate conference in December.

ICC is leading the business representation in each of these three processes. As a complement to this work, ICC will unveil a new revision of its Sustainable Development Charter at a special event in Mexico later this week. The third iteration of what has become a widely respected toolkit for industry, the 2015 Charter sets out a progressive-but practical-roadmap to help companies shape their own business sustainability strategy. It is aimed particularly at providing a common and accessible starting point for SMEs and businesses in emerging and developing markets.

For more information on our work in this area please contact: Louise Kantrow (ICC Representative to the UN) or Andrea Bacher (Policy Manager, Environment and Energy). Alternatively, get in touch with your local ICC national committee.